Millennials may doom the TV business

The overall traditional pay-television universe
keepsgetting smaller. The entire industry, which
includes cable and satellite providers, dropped 795,000
subscribers in 2016, more than twice what it lost the previous
year, according to data from Leichtman Research Group (LRG).
Those numbers have heated up in 2017 with slightly more than 1
million homes cutting the cord with cable.

Those numbers are troubling on their own, but they seem worse
when you look at recent data
fromNielsen. In its most
recent Comparable Metrics Report, the research firm showed that
people ages 18-34 -- the age group known as millennials -- simply
watch less television than older generations. That suggests
cord-cutting could get worse as more digital-native generations
grow up, but that's only one way to read the data.

What does the report say?

People ages 18-34 (millennials) only watch 19 hours and 18
minutes of TV each week. That's less than the nearly 31 hours
watched by the 35-49 age group, and less than half the 46 hours
and 32 minuted of TV watched each week by people ages 50 and
over.

Millennials do spend more time each month using TV-connected
devices (DVD, Game Console, Multimedia Device, VCR, etc.), but at
about three hours more than 35-49-year-olds, and just over five
hours more than those aged 50 or older, it does not eliminate the
overall deficit. In addition, while 18-34-year-olds use their
smartphones about five hours more each week than people over 50,
they actually use them a little more than an hour less than
35-49-year-olds.

Basically, when you look across TV, radio, TV-connected devices,
PC, smartphone, and tablet usage, millennials actually have the
lowest total use of the three age groups. The 18-34-year-old
group spends 64 hours and one minute each week on their devices
while 35-49-year-olds clock in at 82 hours and 43 minutes and the
over-50 set spends 82 hours and 54 minutes.

What does this mean?

This research proves that millennials may not fit some of the
stereotypes associated with them. The fact that they actually use
their phones less than 35-49-year-olds is surprising, as is their
overall lower use of all devices compared to all age groups.

The data does suggest that millennials have less interest in
traditional television than other age groups, which suggests cord
cutting will increase as more 18-34-year-olds start living on
their own. That's possible, but it's worth noting that this trend
isn't new. Going back to Nielsen data from Q4 2008,
18-24-year-olds and 25-34-year-olds (as it was broken down in the
report) watched less TV than older age groups. In fact, from ages
18-24 through each group tracked, TV consumption increased as
people got older.

Is TV doomed?

Viewing patternsare
changing and millennials appear to be more willing than other age
groups to consume entertainment on TV-connected devices rather
than through cable or satellite connections. That seems likely to
continue since streaming services cost less than traditional
pay-TV packages. That probably means cord cutting continues its
steady growth, but it's a shift in how TV gets consumers not the
death of television.

Content providers and cable companies would be smart to continue
to develop alternative delivery methods to serve millennial
needs. But, as that age group gets older, its members are likely
to see their overall TV and TV-equivalent content consumption
increase. Cable and satellite services may not be dying, but
they're going to shrink as a delivery method. Watching
television-style content and consuming screen-based
entertainment, however, seems as healthy as it has ever been.